After considering components of financial market and examples of how it finances capital for company (IPO). It is important for us to have a understanding of the characteristic of the financial market, including participants.

Financial market as a whole is the largest and most efficient market in the world, it breaks the limitation of space and time (of transaction) to make a deal. It provides chance to everyone to join the transaction, especially in first and second market. It must be noted that there is no difference between each force in the market qualitatively, the only difference is how strong the force you held, or in other words, the quantitative difference. This feature makes financial market offers everyone chance but simultaneously everyone risk, proportional to how much you held now. It seems the fairest market in the world.

However, otherwise, the big agency like banks and mutual funds can take advantage over the amount of capital they own by manipulating the market price in all sub-markets, making profit out of nothing, like what George Soros do in 1992 and 1997.

Overall, as we comprehend the essence of financial market is the counterbalance of confidence of investor in money term, we should rationally make our decision in financial market.

Reference:

Beattie, Andrew . “How did George Soros “break the Bank of England”?.” Investopedia. n. page. Web. 3 Nov. 2013.